* Dollar index hits 15-month low but recovers
* Sterling slides after BoE comments on pound weakness
* Australian dollar hits 15-month high vs U.S. dollar
(Recasts, updates prices, adds detail)
NEW YORK, Nov 11 (Reuters) - The dollar climbed from a
15-month low against major currencies on Wednesday in a
technical rebound after selling pressure failed to push the
U.S. currency through key levels.
Until its recovery, the dollar was down for most of the
session, hurt by downbeat views by Federal Reserve officials on
the U.S. economy and bullish economic data from China that
bolstered risk appetite.
Fed policy makers said on Tuesday any recovery in the U.S.
economy would be erratic, bolstering the view that interest
rates would stay low and undermine the dollar with no new U.S.
data to drive trading. For details, see []
Sterling fell broadly, after Bank of England Governor
Mervyn King said weakness in the currency would help UK
exporters and aid Britain's recovery from recession.
"It was a technical failure to break through the old lows
on the dollar," said Joseph Trevisani, senior market analyst at
FX Solutions in Saddle River, New Jersey. "It's still looking
lower but it is going to take a stronger push for the dollar to
get through on the downside."
Midway through the New York session, the dollar index was
up 0.2 percent at 75.181 <.DXY> after going as low as 74.774,
its lowest since August 2008, despite the gains against the
pound.
The euro <EUR=> was down 0.1 percent at $1.4962, off a
session high of $1.5048, according to Reuters data. The euro
faces key resistance against the dollar around $1.5060,
Trevisani said.
The dollar also fared well against the pound.
Sterling <GBP=> fell 1 percent on the day to $1.6564,
having earlier fallen as low as $1.6553. It was the biggest
one-day drop since Oct. 23 at current prices.
Earlier in the global session, BoE governor King emphasized
the need for the UK economy to rebalance away from imports to
exports and said a weaker pound would help achieve this.
[]
King spoke after the central bank issued its quarterly
inflation report, which said UK inflation would be below target
in two years' time if interest rates rise gradually from
mid-2010, as expected by the market [].
"Most importantly, he refused to rule out an end to
quantitative easing and said there's no limit at all on the
program," UBS currency strategists said of King's comments.
"Clearly King favors a weak pound, and we still hold the
view that policy uncertainty may restrict sterling's expected
gains based on valuation adjustments," they added.
REVERSAL
The dollar's gains in the New York session completely
reversed the earlier trading theme where the dollar was hurt by
strong Chinese economic data that spurred investor appetite for
risk -- generally a negative trend for the dollar.
[]
"China data came in quite good, which elevates risk
interest," said John McCarthy, director of foreign exchange at
ING Capital Markets in New York. U.S. "yields are abysmally low
and nothing suggests they will be raised soon."
The strong Chinese manufacturing data, which showed the
export-driven economy was maintaining its recovery, helped push
the high-yielding Australian dollar to a 15-month high against
the U.S. dollar before those gains evaporated on the
greenback's strength.
The Aussie was last down 0.2 percent at $0.9282 <AUD=>,
having earlier traded to its highest since August 2008.
The dollar rose 0.1 percent against the yen to 89.91 yen
<JPY=>.
Trading was described as relatively light with the U.S.
bond market and the government closed for the Veterans Day
holiday.
(Reporting by Nick Olivari; Editing by Leslie Adler)
